Unlisted subsidiaries set to breathe easy on disclosures

ICAI considering new standard with lower disclosure requirements which saves time, costs

- Gireesh Chandra Prasad

Idea is to reduce compliance burden on privately held group entities.

(ISTOCKPHOTO)

Unlisted subsidiaries of listed companies and other large businesses that follow globally harmonized Indian accounting standards will soon be less burdened with financial disclosures.

Accounting rule maker Institute of Chartered Accountants of India (ICAI) is considering a new standard that will lower the disclosure requirements of these entities, saving time and cost for them, president Charanjot Singh Nanda said.

‘The logic is that since the group parent already follows global best practices under Indian Accounting Standards (Ind AS) and consolidates the financials of these unlisted subsidiaries, there is a case for cutting down the elaborate and time-and-resource-intensive financial analysis that these subsidiaries with little public interest have to prepare.

To be eligible for the easier rules, these unlisted entities should not have taken any public deposits. The idea is to reduce the compliance burden on privately held group entities while maintaining group-level transparency through consolidated financials.